To invest in commercial properties or pour money into luxury apartments, this has been the question frustrating Wenzhou businessman Alex Wang since the government launched its rigorous policies to curb speculative home purchases in mid-April.

"Though recent tightening real estate policies have made property investment riskier, it is still a comparatively safer bet than stocks. And because of the strong inflationary expectations, you have to find a place to put your money," Wang said.

Wang's thinking is quite typical among Wenzhou investors, regarded as the most astute business people in China. Industry experts estimated that Wenzhou's private capital could be around 600 billion yuan. Due to limited investment channels, quite a number of them still chose property as their primary investment tool. But this time, they are looking to commercial properties and high-end residential projects.

Lu Yin, director of Zidoo Group Co Ltd, the developer of the BDA Plaza in Beijing's Yizhuang area, said enquiries from potential buyers had increased by 40 percent after real estate tightening took effect.

"Besides institutional buyers, quite a number are individual investors with spare money on hand," said Lu.

In fact, even though the price of some residential projects in Beijing's suburban areas has dropped around 10 to 15 percent in May, it remains above the commercial sectors. Smaller offices at BDA Plaza sell at 10,000 yuan per square meter, but the unit price of surrounding residential projects is around 14,000 yuan per sq m.

With a competitive price and a steady yield, commercial properties are definitely an attractive alternative to residential properties, but the biggest challenge for individual investors is the management expertise required.

"Investment in commercial properties, especially the retail sector, is not an easy task for individual investors. Merely holding it after you purchase may mean that you lose money," said Wang.

"Such investments will be lower risks compared with common residential purchases, given the ever-decreasing supply and China's long-term economic growth potential," Wang said.

According to Luo Ye, deputy general of Xanadu, a high-end project in Beijing's Central Business District, 30 apartments were sold in just one week when they went on the market earlier this month, with quite a number of the buyers coming from Hong Kong.